Pleas for positive approach

Business groups have called for the Victorian government to put aside difficulties with its revenue and capital projects and deliver a positive economic message in today’s budget.

The government has played up the challenges it faces in lower-than-expected GST revenue and surprise cost imposts on capital works.

Victorian Employers Chamber of Commerce and Industry chief economist Steven Wojtkiw said the government was “softening up Victorians for a horror budget".

“However, business confidence is the key to investment, economic growth and taxation revenues [and] business confidence [is] plummeting – this needs turning around and we must talk the state economy up," he said.

The chamber has called for curbs on the bureaucracy, as well as further infrastructure investment and tax reform.

“While Victorian business appreciates the government has its challenges, it should be noted that the Kennett government faced a massive deficit position when it came to power and it was able to undertake a major infrastructure program and a wholesale economic reform agenda, including tax reform."

Australian Industry Group Victorian director Tim Piper said “confidence is so often born out of the views of state government.

“It is not as if we have an economy looking like many other economies around the world. We still have major positives that should be recognised."

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Mr Piper said it was true the state’s financial position was not as strong as might have been expected.

“But we have to be positive, and therefore business needs to be given a positive lead from the government," he said.

ANZ Bank senior economist Julie Toth said the budget, like its federal counterpart next week, was expected to be “geared toward finding savings over the outlook period".

“These will be necessary in order to match revenue shortfalls and to cover an estimated $5.2 billion in election commitments (against $1.6 billion in pledged savings), while also meeting election pledges to not introduce new state taxes nor increase state debt," she said.

Health Minister
David Davis
confirmed yesterday that the government’s long-term plan for the metropolitan health system, which it had promised to produce within 150 days of winning power, would be released tonight following the budget.